EEYOU ISTCHEE JAMES BAY, Que. – Liberal Premier Philippe Couillard trumpeted Quebec’s reinvigorated northern development plan Thursday during a ground-breaking ceremony for province’s first diamond mine, a $1-billion project that he said shows Quebec is “open for business again.”
Developed by Stornoway Diamond Corp. (TSX:SWY), the operation was formally launched with a ceremony in a remote area 350 kilometres north of Chibougamau, nestled in the Otish Mountains in Cree territory.
Once mining gets underway, the mine is expected to make Quebec the sixth-largest producer of diamonds in the world.
The go-ahead comes as Stornoway secured $946 million in funding for its Renard mine earlier this week with Investissement Quebec and the Caisse de depot et placement, Quebec’s largest pension fund manager, both participating in the financing.
The province has a 29 per cent investment in the project, which Economic Development Minister Jacques Daoust says will translate into $1 billion in taxes and interest for the province.
“It’s a clear signal of the relaunch of the Plan Nord,” Couillard said Thursday, keeping with an election promise to return the focus to developing northern Quebec.
“Like they say in English: Quebec is open for business again.”
Plan Nord, an ambitious multibillion-dollar northern development plan, was initially introduced by Quebec’s previous Liberal premier, Jean Charest, in May 2011.
The Liberals have criticized the minority Parti Quebecois government for neglecting the plan while it was in power for 18-months before being defeated in last April’s election. It calls for major investment in the province’s north through mining, energy, infrastructure and conservation projects over a 25-year period.
The Stornoway diamond mine is expected to yield 1.6 million carats a year over 11 years, but the company says it is prepared to extend the mine’s life to 20 years.
Stornoway (TSX:SWY), based in Longueuil, Que., said commercial production is scheduled to begin in the second quarter of 2017. The government said the 30 months it will take to build facilities will create about 600 jobs, while mining activities will create 475 direct and 600 indirect jobs.
Stornoway president and CEO Matt Manson called the Thursday’s ground-breaking the “most significant milestone yet in the long journey to bring Quebec’s first diamonds to market.”
“The Renard Diamond Project is now fully permitted, financed, and ready to build,” he said.
A provincial road was built in partnership between the government and Stornoway to get to the mine. The 240-kilometre extension of provincial highway 167 was not without controversy. The deal to build it was renegotiated by the former PQ government to bring the overall cost down by about $125 million from the original $472 million price tag.
On the Toronto Stock Exchange, Stornoway shares closed up two cents at 69 cents on Thursday.